Jerusalem has a reason to celebrate. In the coming weeks, 8,300 employees of two major companies will visit Israel on what is called "incentive trips." They will leave $20 million behind them, not including prices of flight tickets from the US and Latin America. "No international conference to date has made such a financial contribution," says Eshet Incoming CEO Amnon Ben-David, which won a hosting tender together with the Jerusalem municipality (Jerusalem and Athens reached the finals of the tender).
No country, destination, or tourism provider would be indifferent to a share of incentive tourism. The sector is growing by leaps and bounds, with annual turnovers in the tens of billions of dollars. It includes incentive tours for outstanding employees, managers, and customers. Incentive tours totaled an estimated $60 billion in 2018. 50% of incentive tours globally come from US companies.
Competition in recent years has spread from countries and destinations to companies-prestige-luxury competition, which is where creativity comes into play. The trips and tours are sometimes conducted in luxury vehicles, in tours of exotic islands, on African safaris, etc. They sometimes go to a remote destination with urban or other features. Most of the tours include the spouses of the "outstanding sellers," and sometimes also children. The company pays for the trip, and sometimes charters airplanes for special flights.
5,000 sales representatives of US insurance company WSB from the TransAmerica insurance group will participate in tours in Israel. They will spend six nights here (half in Tel Aviv and half in Jerusalem). 3,300 outstanding employees of Mexian pharma and food supplements company Omnilife will join the fun, spending six nights in Jerusalem and visiting all over Israel, including attending mass in Nazareth.
Thousands on the huge tours in Jerusalem will participate in events in the Hinnom Valley, for which enormous stages will be constructed. Israeli folk artists, hundreds of buses, stewardesses, and tour guides were also ordered. Every provider will get a piece of the incentive tours pie. Ben-David, who has been working in incentive tours for 30 years, estimates that every such tourist will spend $500 or more on shopping, independent tours, and meals not included in the tour.
Goal: To become an incentive tours capital
A crowded city like Jerusalem requires special logistical preparation (imagine 100 buses simultaneously unloading tourists at the same point in the city). Jerusalem Mayor Moshe Lion said that the municipality had set a goal of turning the city into an incentive tours capital, and was preparing accordingly. He said, "In the past two years, we have launched special routes and grants for encouraging incentive tourism in the hope of continuing to host more tours of this kind."
Jerusalem Conventions and Visitors Bureau director of tourism Ilanit Melchior says, "This is an event on a scale that we haven't seen before. In contrast to conference tourists, these tourists have most of the time free. This is of enormous financial importance for all of the businesses in the city. It's double the number of tourists who visited Tel Aviv for the Eurovision Song Contest in May, and preparations are being made accordingly."
Ben-David gives a complicated answer to the question of how hard it is to market Israel in global incentive tourism tenders. "Israel is one of the world's most expensive tourist destinations, and there is also concern about security. The challenge in bringing a company in its first incentive tour is therefore a difficult one. The two companies now coming have a religious affinity to Israel. WSB's founder and chairman is a Catholic who has visited here on a pilgrimage tour, and most of the people in the other group are Latin American Catholics.
"In 2012, the company sent 1,400 sales agents on a tour. The motive was "the holy land," and large part of the consideration had to do with pilgrimage. Other companies are motivated by history, Israel as a startup nation, and so forth. Companies that have already been conducting incentive tours for 15 years are finally getting to Israel, after being in Rome, London, South Africa, and China. In addition to these two projects, we are hosting 50 tours with 100 participants each in 2019."
The two large tours will be accompanied by communications teams. Every such item contributes to both the company's public relations and Israel's public relations, and these public relations are of huge importance.
Ben-David explains that in order to win these tenders, it is necessary to obtain help from the authorities, including subsidies. "Unfortunately, the Ministry of Tourism has invested almost nothing in this to date. We wouldn't have won the tender without financial support from the Jerusalem Development Authority and the Ministry of Jerusalem Affairs and Heritage, which subsidized part of the cost of the gala events; $2 million was invested in these events alone."
"Globes": How important is the connection to these huge companies?
Ben-David: "WSB has 26,000 sales representatives, and they send the outstanding ones to a different destination each year. They have visited Vietnam, Madrid, Paris, Rome, and Hawaii. They have focused on cruises in recent years, and are now searching for other things.
"Omnilife has 5.6 million sales representatives, and Israel has to be part of the calculation when they send the outstanding ones for vacations. The WSB visit alone encompasses 142 flights. Omnilife's guests will spend 48 hours traveling to and from Israel, including special flights from Mexico City and Cancun. The world is running after them, because it is a very economically attractive segment of the tourism market. If a tourist in Israel spends an average of $1,000-1,200, an incentive tourist is equivalent to $3,000 in spending.
"The lower the number of participants in the tour, the bigger the investment. Several months ago, 40 sales agents of Skoda Austria were hosted here. The company paid $6,000 for four days of hosting that included luxury hotels, gourmet meals, and a helicopter tour."
"Overseas vacations are cheaper than vacations in Israel"
Employees in Israel are also part of incentive tourism, especially by companies whose sales are a function of meeting their targets. "The employer's aim is for the employees going on such a tour to come back on a high. There must be no mishaps. We are asked to find excellent hotels, so that the employees always feel that no expense was spared for them," Carmel Tourism CEO Yigal Avni says.
"Sometimes the name of the destination, such as the Seychelles Islands, the Maldives, etc. does half of the work," he adds. "The goal is to do something completely new each time. Many outstanding agents have already been to many countries, and when there's a new destination, the incentive tours flock to it. The latest star is Mauritius. Nearby destinations can also get people excited, and the plan is to fill the tours with content, such as a helicopter tour over volcanoes and restaurants recommended by the Michelin guide. This content makes the tour 40% more expensive than an ordinary tour."
Ophir Tours business development manager Rotem Evron subdivides incentive tours into three segments. Besides a reward for meeting sales targets, he lists team spirit-building and benefit tours as a second segment and a sunbathing trip with no content (tours, etc.) as a third. The budget is the main factor, and overseas tours are at the expense of sites in Israel.
"Overseas vacations today are cheaper than vacations in Israel," Evron says, adding, "The employer not only saves money, but also benefits from the employees' perception that an overseas vacation is worth more. The goal is to find a destination with a flight of up to two hours, and there are many such destinations, such as Greece, Romania, Bulgaria, Georgia, Cyprus, Budapest, and Prague. When you calculate the cost of a vacation, including a flight and a hotel, all of it is cheaper than a vacation in Eilat or anywhere else in Israel. For the employee, once he goes through duty free, it's already worth more."
Another way of both being creative and saving money is to go to less popular destinations sponsored by low-cost airlines flying from Israel. Among others, Evron lists an increase in incentive trips to Debrecen, the second largest city in Hungary, and Cluj in Romania. "I'm assembling a package of a four-day luxury trip for NIS 2,500. It costs 30-40% less per employee than the prices in Israel," he says.
Avni estimates that 50,000 Israelis go on luxury incentive trips a year, and another 100,000 go on less luxurious trips. Evron estimates spending at $800-1,000 per employee. "I recently sent an advertising firm on an overseas vacation, and five-six other firms asked me and my competitors to devise a vacation for them with a more valuable gimmick or a more luxurious hotel. We see the same thing with insurance, credit, and communications companies. Every company wants to get a buzz for pampering its employees better than its competitor. We're all profiting from it," Evron says.
Published by Globes, Israel business news - en.globes.co.il - on September 10, 2019
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